A year ago, when The Virus was still a fuzzy rumour, one was already plagued by the puzzle of the three zeros : the skeletal numbers of no interest and near nil inflation lined up for a danse macabre around the grave of zombie growth.
Never seen this before. This is different. This can’t be true! One has been muttering since 2008. The year the fundamentals died. Reality producing irrational number combinations?
“How dare it!”
Real economic events have a long tradition of deviating from academic prescription. J.M. Keynes opens his General Theory complaining about economics’ lack of relevance to the real economy. Today one again professes to be aware of one’s lack of relevance. Hence the push for pluralism.
Relevance is about expertise resonating in real life, about knowledge transmission into application and implementation. Or not.
14 months ago Greta Thunberg got criticised by then US treasury secretary Steven Mnuchin. The activist’s call for investors to divest fossil fuels showed “… a lack of understanding about the economy and jobs … After she goes and studies economics in college, she can come back and explain that to us,” he said at the World Economic Forum in Davos.
Apparently Steven Mnuchin’s wife was with Greta on this one, tweeting support ? Imagine the couple’s conversation. As in the Cambridge Capital Composition argument she, like Joan Robinson, may have won the argument but lost the battle. And with mega tweet tanker Trump on the trigger anyone might be forgiven for un-tweeting?Turns out Mnuchin was embarrassing not just his wife but his alma mater Harvard , home of no less than mainstream aristocrat Nobel prize winning William Nordhaus. Why was Mnuchin not listening to the economists who awarded him his BSc? Here is Greta’s response faked into what she could have texted:
“Economics degree like you have? Seems to make no difference to your political preferences? Why not do what your professors recommend? As to basic maths skills I have not unlearnt them in my gap year. I can still see words, let alone deeds do not add up to stay within the budget. Combining faith in eternal growth with even more faith in new technologies still just leaves you with faith. If faith is all we got we might as well believe in the Good Life for All and make that happen? Or shall we wait another two generations for more goodness to trickle down and lift all boats? Most likely the oceans will have lifted the boats out of reach by then.”
The elders always say : “Nothing we could have done. You got no idea of what it was like then.”
A conclusion de facto arrived at already, perhaps, not just by the minority of resisters but the majority of the willing but resigned : there is no alternative! Greta’s generation needs more than green cement and a solution to energy storage. It needs alternatives all over.
The ongoing crisis of competence and legitimacy is the opportunity to remind oneself that it does not have to be like this. In spite of the incessant incantations of the incumbents there are alternatives. And plural is good. Complexitiy requires diversity. Most urgently economically. Not just in academia but, in the the real political economy. Technical progress won’t be sufficient. It’s at the structural levels of power, politics and money that innovation is most urgently needed.
This is when TINA always turns up: “Can’t go there, kiddo.” Many ageing incumbents may be willing, but they are wilting. Even if they wanted to do it, they couldn’t. Too set in their ways. Hoping the elders are gonna sort this won’t end well.
‘Why didn’t you do something else?’ Greta’s children may well ask. ‘You couldn’t think of anything?’
There is no planet B. There better be a plan B.
Just follow the money …
CasP-RWE-review 22/9/2021 The ritual of capitalization by Blair Fix
…”Perhaps the most important question is where this ritual (of capitalization) is headed. Does capitalization have a longterm future? Neoclassical economists like William Nordhaus (2007) think so. He is happy to apply the capitalization ritual to existential crises like climate change. And the net present value of his calculations
tells him that we should do essentially nothing. But of course, by applying a heavy discount rate to future income,”doing nothing” is what Nordhaus assumed in the first place. It is ritualized apathy. …”…
teenvogue.com 23/1/2020 AOC Shared Support for Greta Thunberg After Trump Administration’s Steven Mnuchin Talked Down to Her BY LUCY DIAVOLO – Representative Alexandria Ocasio-Cortez (D-NY) has stepped up to defend 17-year-old climate justice activist Greta Thunberg after the latest remarks by a member of President Donald Trump’s administration. The congresswoman known as AOC took to Twitter to share her support for the youth activist after Steven Mnuchin, Trump’s treasury secretary, entered into his boss’s beef with Greta.
vox.com 23/1/2020 The right keeps attacking Greta Thunberg’s identity, not her ideas – by Anna North – Steve Mnuchin says she needs to go to college before she talks about climate change. It’s part of a bigger pattern – It’s Steven Mnuchin who should listen to economists on climate change – There’s overwhelming consensus among scientists for more aggressive action
Treasury Secretary Steven Mnuchin took time out of his day at the World Economic Forum in Davos, Switzerland, on Thursday to suggest that Greta Thunberg should stop speaking out on climate change policy, adding, “After she goes and studies economics in college, she can come back and explain that to us.” … Thunberg countered Mnuchin’s comments with an argument more grounded in the physical sciences: We are facing extremely disruptive warming consequences absent a dramatic change in policy trajectory, and one really doesn’t need to know much about economics to understand that. But a good question for Mnuchin and other Republican Party policymakers probably is: Why don’t you listen to what economists have to say about climate change, if you think Thunberg’s ideas are too economically destructive?
For economists, the gold standard of climate policy continues to be the idea of taxing carbon dioxide emissions. That was the point of a January 2019 letter signed by thousands of PhD-wielding economists, including more than two dozen Nobel laureates, all four living former Federal Reserve chairs, and Treasury secretaries and Council of Economic Advisers chairs from both parties.
That letter called for a four-fold program:
- A carbon tax of $40 per ton, rising at 5 percentage points more than the rate of economy-wide inflation per year
- Cash rebates financed by the tax revenues
- Relief from certain emissions-related regulatory mandates
- A “border adjustment” so that carbon-intensive imports would also be taxed
This is not necessarily the end-all, be-all of good climate policy. There are reasonable arguments that standard economic models understate the degree of economic harm. There are also reasonable arguments that the exercise of economic modelling itself understates the harm created by things like species extinction, wrecking the viability of indigenous people’s traditional lifestyles, and rendering small island nations uninhabitable. It seems to me that pricing-centric strategies also underrate the role of innovation and downplay the strength of the case for R&D subsidies and early deployment in driving down the costs of new clean technology.
But if you are going to run around the world lecturing people about the need to take economics classes, you should familiarize yourself with the baseline consensus in the economics profession.